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Bitcoins: The Second Biggest Ponzi Scheme in History

garynorth.com

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Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#211

Post by cma »

eigenvalue wrote: post #135
Perseids wrote: post #132

Earlier quoted context omitted.

> There will be an eventual cap at 21 million bitcoins, so satoshis stash is somewhere between 9% to 4% of all bitcoins. Btw: As the rules and mechanics of the Bitcoin network are enforced by the majority of clients it would be pretty simple to invalidate these bitcoins if the majority of the Bitcoin software authors would agree to do so. Just ignore any transaction regarding these old addresses.

Why should they be invalidated? Why shouldn't the inventor of something useful benefit from the invention?

Why shouldn't the guy who comes up with the first Satoshi-invalidation scheme that takes traction not be given half the loot for the effort?

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#212

Post by chockablock »

Perseids wrote: post #151
eigenvalue wrote: post #135

Earlier quoted context omitted.

Why should they be invalidated? Why shouldn't the inventor of something useful benefit from the invention?

He/She/They should, but having 4% of the total amount of a currency in the hand of one completely unknown person / organization is quite a threat to its stability. Also I would see a reward of one billion dollar as pretty excessive. And that is only the worth at the current market value .

Strong parallels here to the case of equity in a new business. It wasn't worth $1B when they did the work, and the likelihood that it would ever be worth a significant amount was low enough that the reward would have to be high to be a useful incentive.

In addition, everyone who bought in over the years implicitly accepted this deal. I'm sure if the inventor had claimed 50% of the total currency pool, there would have been less interest.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#213

Post by macspoofing »

paulgb wrote: post #32

Is this the same Gary North who predicted the collapse of society from the Y2K bug? > North predicted a Y2K catastrophe in print and online,[31] and predicted that a Y2K date-rollover failure of the global Information Technology (IT) infrastructure would precipitate severe disruption and the complete collapse of the international economy, leaving American Christians to restore society following the collapse. http://e…

"North predicted a Y2K catastrophe in print and online, and __HOPED__ that a Y2K date-rollover failure of the global Information Technology (IT) infrastructure would precipitate severe disruption and the complete collapse of the international economy, leaving American Christians to restore society following the collapse"

He definitely sounds like a nutbar.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#214

Post by alecbenzer »

rookonaut wrote: post #62
jswinghammer wrote: post #54

Earlier quoted context omitted.

Yes. Sometimes he's good but definitely not on this topic.

This is maybe a stupid question but what does it mean to be Austrian in this context? Is he born in Austria or is this a reference to the Austrian School of Economics?

http://en.wikipedia.org/wiki/Austrian_School

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#215

Post by mschuster91 »

parasubvert wrote: post #69
mschuster91 wrote: post #21

The author completely omits the two main advantages of Bitcoin over traditional currencies/banking: 1) it's blazing fast. Ten minutes and someone deep in African desert can wire money to a researcher on one of those scientific outposts. Try to do that with a bank. 2) If done right, Bitcoins are anonymous like cash. In light of the recent NSA scandal, I don't believe a second that the NSA/other governments will reduce…

1) With a telephone and a banker, all it takes is 10 minutes to do the same wire transfer. At worst, it would require a fax machine to sign the paperwork. 2) This is wishful thinking. Large currency transfers by law need to be reported by most states, whether Bitcoin or not. A thousand dollars is not large ($10k is typical). Your scenario here is effectively saying it's easier to break the law with bitcoin. All you a…

1) Nope. This initiates the transfer - but (at least here in Europe) it will take at least one bank day if you're sending money across different bank chains. So, bitcoin is faster in the full cycle.

2) There are reasons you do not want the state knowing what you do. The less the state knows, the better.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#216

Post by migrantgeek »

shawnz wrote: post #188
mathattack wrote: post #136

Earlier quoted context omitted.

His core point is still true - when the price is so volatile, it's now not a means of exchange, it's a speculative investment where the last buyer will get 0. It's kind of like the Palm/3com mispricing in 2000 when the subsidiary was worth more than the parent.

I don't understand this point of view. Is there some expectation that once bitcoin goes down it will never go up again? Why is there going to be a "last buyer"? We have already seen a couple of significant drops in the value of bitcoin and it has not deterred people from using it.

I think the point is that people aren't buying bitcoins like I might exchange my money for South African Rand.

When I exchange Dollars for Rand, I can more easily use the Rand to purchase goods and services in South Africa. I'm not speculating the Rand will be worth more in 2 weeks time. I just want something more fungible.

It seems people who are buying bitcoins now aren't doing so to purchase goods/services. They are buying and hoping the price goes up.

I'm just guessing but I'd bet most of the transactions happening now are for speculative purposes and not for increased fungibility which I believe to have been the point.

If people keep buying as an investment, they'll eventually start cashing out and the herd will follow to avoid losses.

Bitcoin may recover after a future crash but because nothing is really backing it, it's likely it'll fade into history.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#217

Post by mschuster91 »

ceejayoz wrote: post #90
mschuster91 wrote: post #21

The author completely omits the two main advantages of Bitcoin over traditional currencies/banking: 1) it's blazing fast. Ten minutes and someone deep in African desert can wire money to a researcher on one of those scientific outposts. Try to do that with a bank. 2) If done right, Bitcoins are anonymous like cash. In light of the recent NSA scandal, I don't believe a second that the NSA/other governments will reduce…

> it's blazing fast. Ten minutes and someone deep in African desert can wire money to a researcher on one of those scientific outposts. Try to do that with a bank. Square Cash is faster than that, and the money on your debit card is significantly easier to spend than Bitcoin.

Well, but the problem is: when is the money actually on your bank account? With BTC, as soon as the network mines a block with your transaction. With anything involving multiple banks or even cross-continent transfers, the delay will be >1 day minimum.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#218

Post by macspoofing »

sz4kerto wrote: post #91
theboywho wrote: post #80

Important to note: The author of the article, Gary North, is the same guy who predicted a "failure of the global Information Technology (IT) infrastructure and that it would precipitate severe disruption and the complete collapse of the international economy, leaving American Christians to restore society following the collapse." Also, he "favors capital punishment for a range of offenders; these include women who li…

I just don't see how is one's view on abortion validate or invalidate his views on Bitcoins. Care to explain?

Inevitably you have to trust some expert opinion because there isn't enough hours in a day to research everything yourself. I don't know about you, but someone who holds the insane views that this nutbar does, would certainly make me question his competency to give sound economic advice.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#219

Post by makomk »

nwh wrote: post #100
Dylan16807 wrote: post #87

Earlier quoted context omitted.

4 times weaker? When you're talking about statistical attacks that depends on getting a very small number of random events ahead of your opponent, I would expect quadrupling the numbers to provide significant additional security in the medium term of 10 to 100 minutes. Clearly a litecoin confirmation is weaker than a bitcoin confirmation, but 4 or 12 litecoin confirmations should be much stronger than 1 or 3 bitcoin…

Confirmations are just a measure of computing power essentially. By saying a transaction needs 3 confirmations you are saying that you require 30 minutes of network hashing time before you call a transaction secure. For the same 30 minutes you'd need 12 Litecoin confirmations. The chance of me solving 4 litecoim blocks is the same as me solving 1 bit coin block, assuming the same hash power and difficulty. In reality…

No, confirmations are not just a measure of computing power. The difficulty of carrying out attacks with a sub-50% proportion of the total hash power increases exponentially with the number of confirmations, whereas requiring more work per confirmation only gives a linear increase. Satoshi's original whitepaper explains this.

Re: Bitcoins: The Second Biggest Ponzi Scheme in History

#220

Post by [deleted] »

lmg643 wrote: post #170
pyalot2 wrote: post #42

> In this sense, Bitcoins is not a Ponzi scheme. It is simply a supermoney scheme. Admits that bitcoin is not a ponzi scheme in his own article. > The money was siphoned off from the beginning. Somebody owned a good percentage of the original digits. Implies that most bitcoins are owned by satoshi nakamoto, without substantiating this claim by any number to quantify the impact. The estimated stash of satoshi is about…

there's no question that the author of this article wrote it with linkbait in mind - calling bitcoin a ponzi scheme. having thought about it - the argument that bitcoin is going to be worth a lot "because there are only 21 million" - we have to consider that bitcoin is just one of "n" virtual currencies. while bitcoin may be limited, we already have 37 alternatives (at least) and there's no reason another hundred can…

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